Convenience has been important in the foodservice industry ever since businesses first began providing food to be consumed away from home. Long before there were quickservice restaurants or c-stores, there were mobile caterers at factory gates and "Harvey Girls" providing meals on cross-country rail trips.
Still, convenience as a foodservice term has been used to mean many things over the years. Initially, it meant the availability of food in places where it hadn’t been before, whether it was a train station, a hospital lobby or on a corporate campus.
As a greater variety of frozen, prepared foods were developed for operators, convenience became associated with giving them the ability to offer more meal variety and product sophistication without extensive from-scratch ingredient cooking.
Finally, foodservice convenience has always meant speed. Quickservice, drive-through and fast casual restaurants owed a good part of their success to their ability to deliver food to the customer faster than he’d previously been accustomed to getting it. In the case of drive-throughs, it not only meant food packaged to go, but for immediate consumption while on-the-go. That spelled Convenience with a capital C.
Some years ago, we at Food Management observed another aspect of the convenience trend that was appearing more and more often at our onsite readers’ operations.
We saw them offering pre-packaged products such as those found in retail alongside fresh-prepared grab-and-go foods in new types of displays and in sizes and packaging that had not been widely used in foodservice before.
Some of this food was being consumed on the run, others taken away to be consumed later. Some fell into traditional retail categories of components used for preparing traditional meals at a later time.
We also observed the growing number of convenience stores being built at colleges, hospitals and B&I operations around the country. On the financial side, we saw the growing significance of incremental, "between daypart" sales dollars to the top and bottom lines of our readers.
We coined a term—Convenience Retailing—to describe how all of these things were becoming part of a new delivery strategy our readers were using to more effectively bring their foodservices to market. We felt the term was also an apt one to describe the blur occurring between the traditional retail and foodservice channels, channels that for many years had been kept isolated from each other by the manufacturing and distribution communities.
On page 22, you can read about how San Diego State University generates a third of its foodservice sales via c-stores. Similarly, in our profile of the dining operations at JPMorganChase last month, VP of Regional Operations Charlie Stock expressed his belief that c-store cafés would play a large role in the way departments like his will deliver foodservices to employees in the future.
Clearly, while convenience retailing has come a long way, it is a trend "with legs," with much opportunity for both operators and manufacturers in the future. But because it does represent a new kind of delivery system, it also means anyone hoping to take advantage of it will have to change their traditional ways of doing business.
On the operator side, managing a retail inventory’s mix, turn, velocity and markup requires a different skill set than that required to manage cycle menus, high volume food production and serving systems. Promotions that build retail traffic are different than those used to attract the lunch crowd.
Foodservice manufacturers may have an even bigger challenge. Most significantly, they have to find ways to make traditional retail pack product available more readily through foodservice distribution channels.
On the product development side, frozen convenience foods need to be made available in single and double pack sizes that can be sold from grab-and-go freezer cases. Because foodservice customers like to have even their convenience foods customized "their way," there is opportunity also in providing ready-to-go meals with add-your-own ingredient packs.
Distributors also need to change their ways of doing business if they want to take advantage of the growth opportunities convenience retailing offers. They must work harder at making warehouse slots available for the new products that are required, and to work with suppliers to ensure that the "iron curtain" often separating the retail and foodservice supply chains is broken down.
Operators are insistent that they want single-source suppliers who can handle both their traditional foodservice and their convenience retailing needs. Distributors and manufacturers who ignore these demands will do so at the expense of their own growth.
Convenience retailing promises very significant future opportunities for operators, manufacturers and distributors. To take take advantage of that opportunity, they need to make it part of their strategic thinking and planning now.